KARACHI: The State Bank of Pakistan (SBP) has announced a new category of foreign currency and rupee value business accounts to enhance financial inclusion and facilitate non-resident Pakistani investors.
This latest initiative includes the introduction of the Foreign Currency Business Value Account (FCBVA) and the Non-Resident Rupee Business Value Account (NRBVA).
The SBP has issued directives to banks and authorized dealers in foreign currency, referring to Chapter 6 of the Foreign Exchange Manual, which outlines the general instructions for opening and maintaining foreign currency accounts in Pakistan. The newly established Foreign Currency Business Value Account aims to provide ease of access to overseas entities with a majority shareholding of non-resident Pakistanis.
Foreign Currency Business Value Account (FCBVA)
The SBP has added Para 8B in Chapter 6 of the Foreign Exchange Manual, detailing the operations of the Foreign Currency Business Value Account (FCBVA). Authorized Dealers (ADs) may open FCBVAs for legal entities registered abroad and majority-owned by non-resident Pakistanis or POC holders. However, sole proprietorships or unregistered partnerships will not be eligible.
General Operations of FCBVA:
• ADs may facilitate transactions through electronic channels alongside traditional banking methods. A checkbook may be issued upon request.
• Real-time online convertibility from foreign currency to PKR will be provided, ensuring transparency in exchange rates.
• Dormant FCBVAs can be reactivated digitally, aligning with regulatory requirements.
• ADs will conduct regular monitoring to mitigate money laundering and terrorism financing risks.
Credits to FCBVA:
• Remittances from abroad via banking channels.
• Transfers from the entity’s Non-Resident Business Value Account (NRBVA) in PKR.
• Profits, returns, or sale proceeds of investments made from FCBVA.
• Reversal of erroneous debits.
Debits from FCBVA:
• Investment in government-registered foreign currency securities and term deposits.
• Transfers to NRBVA or other currency accounts.
• Remittances without prior SBP approval.
• Payments in PKR within Pakistan.
Non-Resident Rupee Business Value Account (NRBVA)
Alongside the FCBVA, the SBP has introduced the NRBVA to facilitate non-resident Pakistanis in managing rupee-based transactions. Para 8A has been inserted in Chapter 8 of the Foreign Exchange Manual.
General Operations of NRBVA:
• Digital and conventional transaction facilities.
• Reactivation mechanism for dormant accounts.
• Online convertibility between NRBVA and FCBVA with clear exchange rate disclosures.
• Compliance monitoring for money laundering risks.
Credits to NRBVA:
• Foreign remittances.
• Transfers from FCBVA.
• Profits or proceeds from approved investments.
• Correction of erroneous debits.
Debits from NRBVA:
• Investments in registered debt securities, stocks, and mutual funds.
• Transfers to FCBVA or other currency accounts.
• Remittances without prior SBP approval.
• Other permissible local payments.
This latest move by the SBP ensures greater financial flexibility for non-resident Pakistanis and overseas businesses, strengthening investment opportunities in Pakistan’s financial system while maintaining stringent monitoring of currency transactions and exchange rate mechanisms.
